JURIST - Paper Chase: UK court recognizes pre-nuptial agreement in landmark ruling

[JURIST] A British appellate court on Thursday recognized [judgment, PDF] a pre-nuptial agreement for the first time in the UK, where they have been generally disregarded by courts hearing divorce proceedings. The UK Court of Appeal of England and Wales [official website] overturned a lower court ruling that awarded £5.8 million to the ex-husband of German heiress Katrin Radmacher despite a pre-nuptial agreement intended to shield her assets. Noting that the UK's treatment of pre-nuptial contracts sets it apart from both other European Union [official website] countries and the "wider common law world," Lord Justice Thorpe said:

In so far as the rule that such contracts are void survives, it seems to me to be increasingly unrealistic. It reflects the laws and morals of earlier generations. It does not sufficiently recognise the rights of autonomous adults to govern their future financial relationship by agreement in an age when marriage is not generally regarded as a sacrament and divorce is a statistical commonplace.

Thorpe directed judges in the future to "give due weight to the marital property regime into which the parties freely entered." The judgment awards Nicolas Granatino £1 million in compensation, £700,000 for payment of his debts, and a £2.5 million in trust for a familial residence until their youngest daughter turns 22. He is expected to appeal the ruling to the House of Lords [official website].

UK divorce courts have traditionally not taken [backgrounder] pre-nuptial agreements into account when dividing marital assets. Instead, the courts have assessed the financial needs of the couple and any dependents in an effort to protect the financially weaker partner. Thorpe's ruling suggests that recognition of pre-nuptial contracts is in line with the British approach to contracts generally.